Traffic Acquisition Cost - TAC

AAA

DEFINITION of 'Traffic Acquisition Cost - TAC'

Payments made by Internet search companies to affiliates and online firms that direct consumer and business traffic to their websites. Traffic acquisition costs (TAC) are a critical cost of revenue for Internet search firms such as Google, Yahoo and Baidu.com. TAC for these firms is watched by investors and analysts to ascertain whether cost of traffic acquisition is rising or declining. Rising TAC has a detrimental effect on profitability.




INVESTOPEDIA EXPLAINS 'Traffic Acquisition Cost - TAC'

Many Internet companies report revenues both on a gross basis, and on a net basis that excludes TAC. One key metric for these companies is TAC as a percentage of advertising and search revenue, with a rising percentage indicating cost pressures on profitability. Sometimes companies will mention payments excluding traffic acquisition costs using ex-TAC.

RELATED TERMS
  1. Baidu

    The dominant Chinese internet search engine company. Baidu offers ...
  2. Banner Advertising

    A rectangular graphic display that stretches across the top or ...
  3. Click-Through Rate (CTR)

    The percentage of individuals viewing a web page who click on ...
  4. Consumer Internet Barometer

    A quarterly survey report produced by the Conference Board and ...
  5. Cyber Monday

    An expression used in online retailing to describe the Monday ...
  6. Viral Marketing

    Internet advertising or marketing that spreads exponentially ...
RELATED FAQS
  1. What is a "phishing scam" and how can they be avoided?

    The term phishing (as in fishing for confidential information) refers to a scam that fraudulently obtains and uses an individual's ... Read Full Answer >>
  2. What are some common accretive transactions?

    The term "accretive" is most often used in reference to mergers and acquisitions (M&A). It refers to a transaction that ... Read Full Answer >>
  3. What are some ways to make a distribution channel more efficient?

    While there are many ways to make a distribution channel more efficient, the three high-level ways to increase the efficiency ... Read Full Answer >>
  4. How is a tender offer used by an individual, group or company seeking to purchase ...

    A tender offer is made directly to shareholders in a publicly traded company to gain enough shares to force a sale of the ... Read Full Answer >>
  5. How does a company record profits using the equity method?

    A company that invests in another company and has majority control of it would record profits using the equity method. This ... Read Full Answer >>
  6. How does horizontal integration allow companies to share resources?

    In a horizontal integration, a company either acquires another company or merges with that company. This allows the resulting ... Read Full Answer >>
Related Articles
  1. Options & Futures

    10 Tips For Choosing An Online Broker

    This important investment decision happens before you pick your first stock. Find out how to get it right.
  2. Entrepreneurship

    From The Printing Press To The Internet

    Find out how this invention contributed to the development and evolution of the U.S. economy.
  3. Personal Finance

    Tips For Keeping Your Financial Data Safe Online

    Find out how to protect your personal information from phishers, scammers and thieves.
  4. Personal Finance

    Avoiding Online Investment Scams

    Find out how to spot internet fraud and protect your hard-earned money.
  5. Fundamental Analysis

    Which US Airlines Are Poised For Long-Term Gains?

    The US airline industry has undergone a dramatic transformation since the last bear market, with one or two carriers likely to outperform in coming years.
  6. Stock Analysis

    The Delhaize/Ahold Merger: A Buy for Investors?

    The mid-2016 merger of Delhaize Group and Ahold NV will create a supermarket giant, but what will it mean from an investing perspective?
  7. Investing

    How To Profit From M&A Announcements

    We look at four strategies that seek to profit from merger and acquisitions announcements.
  8. Stock Analysis

    The CVS Target Deal: A Healthy Union?

    The CVS Health and Target deal should be a win for both. Here's an analysis with a twist.
  9. Investing News

    Most Important Mergers And Acquisitions Of 2015

    Nearly halfway through the year, 2015 is proving to be a big one for mergers and acquisitions.
  10. Fundamental Analysis

    Explaining Capital Employed

    Generally, capital employed refers to all of the assets used in a business that contribute to the company’s ability to earn revenue.

You May Also Like

Hot Definitions
  1. Unfair Claims Practice

    The improper avoidance of a claim by an insurer or an attempt to reduce the size of the claim. By engaging in unfair claims ...
  2. Killer Bees

    An individual or firm that helps a company fend off a takeover attempt. A killer bee uses defensive strategies to keep an ...
  3. Sin Tax

    A state-sponsored tax that is added to products or services that are seen as vices, such as alcohol, tobacco and gambling. ...
  4. Grandfathered Activities

    Nonbank activities, some of which would normally not be permissible for bank holding companies and foreign banks in the United ...
  5. Touchline

    The highest price that a buyer of a particular security is willing to pay and the lowest price at which a seller is willing ...
  6. Himalayan Option

    An exotic equity option belonging to a class known as mountain range options. Himalayan options are based on a basket of ...
Trading Center
×

You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!